Germany was warned it could face a 220 billion-euro ($240 billion) hit to output over the next two years in the event of an immediate interruption in Russian energy supplies, Bloomberg reported.
Economic institutes advising the government in Berlin said Wednesday in a joint forecast that a full halt in Russian natural gas imports would result in a “sharp recession.”
“The decision to become independent from Russian supplies of raw materials is likely to remain valid even when the military and political situation calms down again,” the report said. “That means part of the energy supply and energy-intensive industry must realign itself.”
While the 220 billion-euro estimate is the equivalent of 6.5% of annual output, it’s nowhere near the almost 890 billion euros in borrowing Germany carried out in 2020 and 2021 to shield the economy from the fallout of the pandemic.